Kosiel v. Arrow Liquors Corp.

• Decision Date: 26 August 1994
• Docket Number: No. 7,No. 96356,J,96356,7
• Citation: 521 N.W.2d 531,446 Mich. 374
• Parties: Doris KOSIEL, Plaintiff-Appellant, v. ARROW LIQUORS CORPORATION and Michigan Mutual Insurance Company (Amerisure Companies), Defendant-Appellees. anuary Term. Calendar
• Court: Michigan Supreme Court

Page 531

521 N.W.2d 531

446 Mich. 374

Doris KOSIEL, Plaintiff-Appellant, v. ARROW LIQUORS CORPORATION and Michigan Mutual Insurance Company (Amerisure Companies), Defendant-Appellees.

No. 96356, January Term.

Calendar No. 7.

Supreme Court of Michigan.

Argued Jan. 12, 1994.

Decided Aug. 26, 1994.

[446 Mich. 376] Kelman, Loria, Downing, Schneider & Simpson by Donald W. Loria, Detroit, for plaintiff-appellant.

Levasseur, Leslie & Johnson, P.C. by Richard B. Leslie, Detroit, for defendants-appellees.

OPINION

ROBERT P. GRIFFIN, Justice.

In this worker's compensation case, plaintiff was found in 1967 to be totally and permanently disabled. Her award included nursing care benefits at the rate of $5 per day until "further order of the Department" for services rendered by her husband. Fourteen years later, plaintiff petitioned for, and was granted, an increase in compensation for such nursing care. We granted leave to consider whether modification of the award is precluded by the doctrine of res judicata. Concluding that res judicata is not a bar in these circumstances, we reverse the decision of the Court of Appeals.

I

This worker's compensation case has its origins in a work-related accident that occurred nearly forty years ago. In 1956, while working as a scrub woman for defendant Arrow Liquors Corporation, plaintiff Doris Kosiel was struck by a truck and received a crushing injury to her lower right extremity. Worker's compensation was paid.

In 1967, following the filing of a petition, a hearing referee ruled that plaintiff was entitled to 215 weeks of compensation for loss of the industrial use of her right leg. The referee also found plaintiff to be incurably insane, that this condition was related to her injury, and that she was totally and permanently disabled. The referee's award, subsequently affirmed by the Worker's Compensation Appeal Board, included the following paragraph:

It is further ordered that Defendant Arrow Liqueurs [sic] Corporation and Michigan Mutual Liability Company compensate plaintiff's husband, Theodore Kosiel, for nursing care rendered by him at the rate of $5.00 per day from and after June 27, 1967, until the further order of the Department. [Emphasis added.]

In 1982, plaintiff petitioned for an increase in the rate of compensation for nursing care. ¹ Following a hearing, a referee ordered that plaintiff's husband be compensated for eight hours of care per day, seven days a week, at the prevailing wage rate of a nurse's aide. Both parties appealed to the WCAB, but subsequently agreed to arbitration in lieu thereof as permitted by § 864 of the WDCA. ² In an opinion dated July 28, 1989, the arbitrator modified the award, increasing the number of hours for which plaintiff's spouse was to be compensated from eight to twelve hours per day, seven days per week. The award was made payable from September 28, 1968, at a rate equal to the hourly pay of an entry level nurse's aide, the rate to be determined by the bureau for each year after September 28, 1968. Plaintiff's claim for interest on unpaid benefits was denied.

On appeal in the Court of Appeals, defendants argued, inter alia, that modification of the 1967 order with respect to the rate of nursing care compensation was barred by the doctrine of res judicata. ³ Plaintiff filed a cross appeal respecting denial of interest. Citing White v. Michigan Consolidated Gas Co., 352 Mich. 201, 89 N.W.2d 439 (1958), the panel reversed the arbitrator's decision and ruled that, absent a showing of change in plaintiff's physical condition since the 1967 order, modification of the order is barred by res judicata. In view of its disposition on that ground, the panel found it unnecessary to address other issues raised by the parties. ⁴ We then granted leave to appeal. 444 Mich. 866 (1993), --- Mich. ----, 509 N.W.2d 156.

II

It is well established that res judicata principles have application in the context of worker's compensation proceedings. Pike v. City of Wyoming, 431 Mich. 589, 433 N.W.2d 768 (1988). See also Gose v. Monroe Auto Equipment Co., 409 Mich. 147, 294 N.W.2d 165 (1980); Hlady v. Wolverine Bolt Co., 393 Mich. 368, 375, 224 N.W.2d 856 (1975); White v. Michigan Consolidated Gas Co., 352 Mich. 201, 89 N.W.2d 439 (1958); Webber v. Steiger Lumber Co., 322 Mich. 675, 680, 34 N.W.2d 516 (1948); Blust v. Nat'l Brewing Co., 285 Mich. 103, 280 N.W. 126 (1938).

Relying on White, supra, defendants have asserted that a prior award of worker's compensation benefits may not be reopened unless a change in the injured employee's physical condition is established. Agreeing with that position, the Court of Appeals explained:

[T]he arbitrator found that plaintiff's husband's retirement constituted a "change in circumstances" that would support modification of the existing final order. A change in circumstances, however, is not the test, but rather a change in the claimant's condition. There is no evidence on the record that would support a finding that plaintiff's condition has worsened, and the bare fact that plaintiff's husband now has more time available to spend at home does not justify reopening the case and modifying the existing order. [Kosiel v. Arrow Liquors Corp and Michigan Mutual Ins. Co., unpublished per curiam opinion, issued March 31, 1993 (Docket No. 121210), p. 2.]

We reverse the decision of the Court of Appeals on a narrow ground that is unrelated to the distinction it draws between a change in "circumstances" and a change in "physical condition." Under the particular circumstances presented in this case, we find that the 1967 order awarding nursing care benefits was not "final" in the sense contemplated for the application of the doctrine of res judicata. ⁵

A

A party may invoke the doctrine res judicata only when the previous decree is a final decision. Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S.Ct. 2424, 2427, 69 L.Ed.2d 103 (1981); see also 1 Restatement Judgments, 2d, § 13, p. 132 ("The rules of res judicata are applicable only when a final judgment is rendered"). The indispensable requirement of finality applies not only to judgments of a court of law, but also to orders entered by an administrative tribunal, such as a worker's compensation board or magistrate:

An adjudicative determination by an administrative tribunal is conclusive under the rules of res judicata only insofar as the proceeding resulting in the determination entailed the essential elements of adjudication, including:

* * * * * *

(d) A rule of finality, specifying a point in the proceeding when the presentations are terminated and a final decision is rendered.... [2 Restatement Judgments, 2d, § 83(2)(d), pp. 266-267.] ⁶

Turning to the 1967 order at issue in this case, it is important to distinguish between the separate determinations made by the hearing referee. On one hand, the referee issued a final adjudicative determination that plaintiff was totally and permanently disabled as of August 30, 1965, and this determination was affirmed by the WCAB. Clearly, the doctrine of res judicata would preclude a redetermination of the extent of plaintiff's disability absent a showing of change in the claimant's physical condition. Gose, supra 409 Mich. at 160-161, 294 N.W.2d 165; Hlady, supra 393 Mich. at 375-376, 224 N.W.2d 856.

However, with regard to the amount to be paid for nursing care, the referee ordered compensation for plaintiff's husband at a rate of $5 per day but, unlike the final determination of total and permanent disability, he placed a temporal limitation on the applicability of the amount--"until the further order of the Department." Obviously, this did not represent a final determination of the value of nursing services for the duration of plaintiff's life; rather, it contemplated the need to adjust the amount at some point in the future in response to such changes as increases or decreases in wage rates or inflation.

To be accorded the conclusive effect of res judicata, "the judgment must ordinarily be a firm and stable one, the 'last word' of the rendering court...." 1 Restatement Judgments, 2d, § 13, comment a, p. 132. Clearly, the referee did not intend the award of $5 per day, "until the further order of the Department," to be the "last word" regarding the amount of nursing care to which plaintiff would ever be entitled.

Our conclusion that the 1967 order lacked the requisite finality is consistent with, and supported by, the jurisprudence of this state. ⁷ Indeed, in White, supra 352 Mich. at 210, 89 N.W.2d 439, a case cited by defendants, this Court said:

[T]he device employed by the appeal board in ordering payment of compensation until further order of the board ... does not finally determine rights to compensation. [Emphasis added.]

Thus, an award of compensation "until the further order" signifies that the order remains in effect until the award is terminated or changed. Sanford v. Ryerson & Haynes, Inc., 396 Mich. 630, 634, 242 N.W.2d 393 (1976). While this phrase typically may appear in the context of petitions for redetermination of benefits on the basis of a change in the worker's physical condition, ⁸ it strains logic to suggest that the temporary effect of its application is limited to such situations. ⁹

B

The determination that the 1967 order of the hearing referee lacks finality also comports with the statutory mandate of the WDCA. M.C.L. § 418.315(1); M.S.A. § 17.237(315)(1) provides, in part:

The employer shall furnish, or cause to be furnished, to an employee who receives a personal injury arising out of and in the course of employment, reasonable medical, surgical, and hospital services and medicines, or other attendance or treatment recognized by the laws of this state as legal, when they are needed. [Emphasis added.]

As indicated, the statute requires the employer to bear the cost of reasonable medical services, or other attendance or treatment of a qualified employee. The...